Sunday, February 23, 2014

Is Walmart Calling for Higher Wages???

Regarding wages and the stagnation of the middle/working class, I once heard the most fascinating encapsulation of the irony that plagues corporate America:

Henry Ford knew he had to pay his workers well enough that
they could afford to buy a Ford;
Walmart, by contrast, pays its workers so poorly that
they have no choice but to shop at Walmart ...

And we could add to that, "draw food stamps and Medicaid." Is that all changing? This week, business writer Al Lewis investigates the strange and unexpected support of a hike in the minimum wage by retail behemoth, Walmart.

Note to the National Retail Federation: You can't keep fighting increases in the minimum wage and then wonder why consumers aren't spending more money in your members' stores.
"It's simple math--if the cost of hiring goes up, hiring goes down," said NRF Chief Executive Matthew Shay. He said this in a Jan. 28 news release opposing President Barack Obama's proposal to raise the federal minimum wage to $10.10 an hour from $7.25 by 2016.

But for low-wage retail king Walmart, it's not so simple. Corporate America, and many in the top 2%, have never seemed to understand that America is a demand driven economy, with consumer spending accounting for nearly three-quarters of the economy. Thus, if the bulk of workers don't have money to spend, corporate earnings will have to go down. And, while the top tier has been able to exploit and profit from low wages for decades, it may have reached the breaking point.

And, of course, this has huge implications for the education world as well. For, as schools and business leaders continue to promote a "College for all" mentality, voices are beginning to counter that "wisdom."  Millenial writer and social critic Matt Saccaro recommends that young people "not go to college," because the debt is not worth the payback. The argument for college has always been that college grads make more money.

So, perhaps the discussion should be about wages .... and not educational credentials.

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